Medicare open-enrollment: Find the right drug plan

JonnelleMarte

Plenty of changes to coverage this year, but experts say users should pay closest attention to their prescription plans.

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Medicare’s open-enrollment period, when the 49 million Americans who use the program can make changes to their 2013 coverage, runs through Dec. 7. Members impacted by Hurricane Sandy who need more time can make changes after the deadline by calling 1-800-MEDICARE, or 1-800-633-4227. (See: Citing Sandy, Medicare bends enrollment deadline).

And this time around, experts say the stakes are greater than in previous years – particularly for retirees who rely heavily on prescription drugs. Higher premiums in certain plans, as well as changes to their coverage, could lead to significantly higher out-of-pocket costs for some beneficiaries who stick with their current option. “You may end up with less coverage than you need or a more expensive policy than you want to pay for,” says Juliette Cubanski, a Medicare policy analyst for the Kaiser Family Foundation.

For example, some Medicare plans will no longer cover Apidra, a drug used by diabetics to control blood sugar. Paying for the drug entirely out-of-pocket could cost users an additional $200 a month, estimates Allsup Medicare Advisor, which consults people choosing between Medicare plans.

During the enrollment period, Medicare users select several parts of their coverage: Medicare Part A and Part B, which cover hospital stays and doctor visits, respectively, and Part D, which handles prescription drugs. Many also purchase supplemental insurance (known as Medigap) or Medicare Advantage (which integrates Parts A, B, D and Medigap).

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For Part D, shopping around may be particularly important this year. Premiums for these drug plans are expected to increase by 7%, on average, after decreasing slightly last year, according to the Kaiser Family Foundation. But some plans are introducing even steeper price hikes. A study by health-care advisory firm Avalere Health found that some of the most popular prescription drug plans are increasing monthly premiums by as much as 23%, while others are lifting costs just 1%.

Not all the news is bad on the drug front. Medicare users that fall into the coverage gap known as the “doughnut hole,” – the threshold when seniors generally have to begin paying the full cost of their medicines – will have discounts of 52.5% on brand-name drugs (up from 50% last year) and 21% on generics (up from 14%). In addition, because of the Affordable Care Act, the sweeping health care reform law passed in 2010, all Medicare plans will offer bigger discounts on drugs and cover more preventive services related to conditions such as depression, alcohol misuse and cardiovascular disease. Some individual plans are introducing other discounts, says Dan Mendelson, chief executive officer of Avalere -- such as cheaper prices for seniors who fill their prescriptions at specific pharmacies.

But to get the best option this year, experts say seniors may have to jump through more hoops than last year. For example, some are requiring prior authorization before certain drugs will be approved, says Mary Dale Walters, vice president at Allsup Medicare Advisor. Others are limiting the quantity that will be covered during a certain time period—say each month. And others are asking doctors to consider cheaper alternatives before they approve more expensive drugs, she says.

Seniors who want to compare the plans available in their area can use free online tools like the Medicare Plan Finder, which can help them estimate what their total costs would be – including premiums, copayments and deductibles -- under various plans. Some people with complex health needs might consider hiring a Medicare adviser to help them choose the right plan. Fees can range from $75 to $400 depending on what types of plans consumers need help with. Some firms charge by the hour and costs can add up for complicated cases.

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